SOLVENCY

This study examines the determinants of insurance sector solvency in Nigeria using panel data from 2013 to 2024. The analysis focuses on Gross Premium Income, Insurance Penetration Rate, and Claims Ratio as the key explanatory variables. An ex post facto research design was adopted, and secondary data were analysed using descriptive statistics, correlation analysis, and panel regression techniques. The Hausman specification test confirmed the fixed effects model as the appropriate estimator. The findings show that Gross Premium Income and Insurance Penetration Rate have positive and significant effects on solvency, indicating that higher premium inflows and deeper market participation strengthen insurers’ financial positions. Claims Ratio has a negative and significant effect on solvency, suggesting that higher claims payments reduce financial stability. Preliminary diagnostic tests support the validity of the model and justify the use of robust estimation procedures. The study concludes that improved premium performance, increased market penetration, and effective claims management are critical for enhancing solvency in Nigeria’s insurance sector. The results provide useful insights for regulators, policymakers, and industry practitioners seeking to promote financial resilience within the industry.